![Cornerstones of Cost Management (Cornerstones Series)](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_largeCoverImage.gif)
Concept explainers
Tony and Tina Roselli own and run TNT’s Pizza Restaurant. Tony is responsible for managing the day-to-day aspects, hiring workers, and overseeing the kitchen, building, and grounds. He is the chief cook and handles all purchasing. Tina is the hostess and manages the front of the house (restaurant talk for the dining area). She schedules the wait staff, ensures that customers are well taken care of, and pitches in to bus tables and refill drinks as needed. Tina also handles the financial aspects of the business and is responsible for bookkeeping and tax compliance. Two years ago, Tony and Tina became parents of a baby boy, Joseph, nicknamed “LJ” for Little Joe. Tina brings LJ to work each day, and both Rosellis as well as the restaurant staff help out watching him. Recently, the restaurant has grown busier, so Tony and Tina expanded the hours of operation. As a result, the staff rarely has any free time and Tina feels she has too much to handle. Tony and Tina are considering outsourcing their bookkeeping and tax-filing needs to a local accountant.
Typically, Tina spends 15 hours per month on bookkeeping and taxes. This increases to 40 hours in April. She uses a room off the kitchen as her office (a room that is sorely needed for additional food storage given the expansion). If Tina continues to do the financial work, the restaurant will need to make up for 75 percent of her time by hiring additional help at $10 per hour (hourly wage plus the restaurant’s cost of Social Security, Medicare, and
Required:
- 1. Given the information, determine whether Tina should do the bookkeeping and tax work in house or outsource it to the accountant.
- 2. Discuss the qualitative factors that would affect the decision, including strategic implications.
![Check Mark](/static/check-mark.png)
Trending nowThis is a popular solution!
![Blurred answer](/static/blurred-answer.jpg)
Chapter 17 Solutions
Cornerstones of Cost Management (Cornerstones Series)
- 9, Provide In-House or Outsource Decision, Services, Qualitative Aspects Tony and Tina Roselli own and run TNT’s Pizza Restaurant. Tony is responsible for managing the day-to-day aspects, hiring workers, and overseeing the kitchen, building, and grounds. He is the chief cook and handles all purchasing. Tina is the hostess and manages the front of the house (restaurant talk for the dining area). She schedules the wait staff, ensures that customers are well taken care of, and pitches in to bus tables and refill drinks as needed. Tina also handles the financial aspects of the business and is responsible for bookkeeping and tax compliance. Two years ago, Tony and Tina became parents of a baby boy, Joseph, nicknamed “LJ” for Little Joe. Tina brings LJ to work each day, and both Rosellis as well as the restaurant staff help out watching him. Recently, the restaurant has grown busier, so Tony and Tina expanded the hours of operation. As a result, the staff rarely has any free time and Tina…arrow_forwardMowit Lawn Care, Inc. operates a landscaping and lawn care business in the Oklahoma City metro area. Mowit's business includes industrial and residential landscaping and lawn maintenance. Mowit has over 100 employees. To carry out its business, Mowit hired several employees including 19-year old Paul Smith to work as a lawn technician. The position of lawn technician includes mowing, edging, trimming hedges, and other general clean-up chores. This position also included operating certain mechanical items such as tractors, lawnmowers, both self-propelled and manual, lawn edgers, weed-eaters, and wood chippers.On or about May 7th, Smith was working on a residential contract for Mowit, which involved cleaning up a yard that had been riddled by the May 3rd tornadoes in the Oklahoma City area. In this capacity, he was assigned to complete a job with his team of removing downed limbs and other natural debris. At this time, Smith had been employed by Mowit for approximately 9 months. In…arrow_forwardPT. Alakishia has been operating in Jakarta for more than 10 years. Aries is one of the employees who is responsible for recording transactions in the purchasing department when ordering raw materials from suppliers. Once, Wilson as the party who made the payments and received the invoices, resigned from the office, so for the moment everything was in Aries' charge. Jenni as COO of PT. Alakitashia really trusts Aries because by seeing the contribution of Aries for a long time, it is also due to the close friendship between them, thus leaving the work entirely and the internal control to Aries itself. This has caused a lack of segregation of duties, so that since it was fully managed by Aries, the number of purchases has increased and it can be seen how the expenses are higher than before, so it is feared that fraud could occur. In addition, Aries has also collaborated with all suppliers and the production department to harmonize the transaction record in the form of the number of units…arrow_forward
- Janice hires Mariam to assist her with the general store duties. Mariam describes herself as an employee at LaBougee Boutique. Mariam works from 8 am to 4:30 pm from Monday to Friday, and from 8 am to 12:30 pm on twoSaturdays a month. Mariam reports to Janice. Janice allocates Mariam with her work schedule for the week, which includes driving the company vehicle to undertake deliveries to clients. Mariam also assists with the administrative work. Mariam requires a day of leave for personal reasons. She approaches Janice; however, Janice tells her that she is not entitled to paid leave as Mariam is an independent contractor. Advise Mariam as to whether she is an employee or an independent contractor in terms of SouthAfrican legislation. Justify your answer fully. 4.1Suppose Mariam has some free time during her working day. Mariam decides to visit her friendMaxene who works at a clothing boutique about 10 km away from La Bougee Boutique. Mariamtakes the company vehicle, however en route…arrow_forwardLucy Quarantina is the owner and manager of a catering company. QCS provides complete meals(breakfast, lunch and dinner), as well as an assortment of hot and cold appetizers and drinks, forgroups of 30 to 300. QCS receives orders in three main ways: e-mail, telephone and personal officeconsultation. In some cases, the customer has an idea of what he/she wants; in others, the customerrelies on Lucy’s expertise to select appropriate items.For each catering job, Lucy prepares an estimate for the client which is documented in a ProposalForm; she files one copy of the estimate and sends the other to the client for approval. The client maymake changes to the estimate over the phone, via e-mail, or through a personal consultation. Once theestimate has been finalized, Lucy prepares a Catering Contract for the client’s signature. She requires50% deposit with the signed contract; the remaining catering fees can be paid within 30 days of thecatering event. Lucy accepts cash and checks; she does…arrow_forwardMichael is the general manager of a production facility. In a routine day, Michael might meet with city officials or civic leaders about environmental issues due to the plant’s presence in the community. After these meetings, he will then meet with the plant’s functional managers to discuss the concerns expressed by the city representatives. Other times, Michael might meet with the production manager, Betty, and the human resource manager, Joyce, to discuss a complaint filed by one of the employees in a production department. Michael might also spend time on the Internet looking for new technologies that can be used in the production processes of his plant. What are the Social Responsibilies the company has towards society?arrow_forward
- Sally works as a manager in the gardening section of her local Bunnings Store. Recently, Sally was approached by a customer asking questions about the store's range of built-in kitchens. Although she knew nothing about the products, Sally recommended the deluxe kitchen package which came with free installation. After completing the sale, Sally handed the customer her Bunnings business card (which identified her as a manager), explained that the customer should get his new kitchen professionally installed and to forward her the 3 party's invoice- which Bunnings would pay. A few weeks later, the customer is shocked to learn that Bunnings is refusing to pay his carpenter's $10,000 invoice and that Sally failed to mention that the offer was capped at $500. Required: a) With reference to Pacific Cariers v Paribas, what is the test for deciding if an agent had apparent authority? b) Analyse whether Sally had apparent authority to bind Bunnings Pty Ltd to this $10,000 contract. C) How would…arrow_forwardJosie is a sales representative for Talk2Me, a communications retailer based in Fort Smith, Arkansas. Josie’s sales territory is Oklahoma, and she regularly takes day trips to Tulsa to meet with customers. During a typical sales call, Josie takes the customers’ current orders for phones, cases, and attachments and, using an app on her wireless phone, sends the orders to headquarters in Fort Smith for immediate action. Approved orders are shipped from the Little Rock warehouse. Are Josie’s sales subject to the Oklahoma corporate income tax? Explain.arrow_forwardMarsha’s Pet Store employs six employees. Their duties are to sell pets, replenish the stock, keep the pets’ cages clean, feed the pets, and maintain good records. Marsha pays a fixed hourly rate and a commission on sales of pets. Lately, Marsha has been finding that the records have not been well maintained and the stock has not been replenished. However, pet sales are good and the pets’ cages are clean. Is Marsha’s current reward structure motivating the employees to pay more attention to the pets than to their other duties? multiple choice True Falsearrow_forward
- Jennifer Caratini has recently accepted the job as the foodservice director for Technomar Industries, a corporation with 1,000 employees. As their foodservice director, Jennifer's role is to operate a company cafeteria, serving 800 to 900 meals per day, as well as an executive dining room, serving 100 to 200 meals per day. All of the meals are provided "free of charge" to the employees of Technomar. One of Jennifer's first job is to prepare a budget for next year's operations. Question:Since employees do not pay for their food directly, what will Jennifer likely uses the "revenue" portion of her budget? How do you think this number should be determined? of her budget?arrow_forwardJennifer Caratini has recently accepted the job as the foodservice director for Technomar Industries, a corporation with 1,000 employees. As their foodservice director, Jennifer's role is to operate a company cafeteria, serving 800 to 900 meals per day, as well as an executive dining room, serving 100 to 200 meals per day. All of the meals are provided "free of charge" to the employees of Technomar. One of Jennifer's first job is to prepare a budget for next year's operations.Question:In addition to her know-how as a foodservice director, what skills will Jennifer likely need as she interacts with the executives at Technomar who must approve her operating budget?arrow_forwardJennifer Caratini has recently accepted the job as the foodservice director for Techmar Industries, a corporation with 1,000 employees. As their foodservice director, Jennifer’s role is to operate a company cafeteria, serving 800 to 900 meals per day, as well as an executive dining room, serving 100 to 200 meals per day. All of the meals are provided “free of charge” to the employees of Techmar. One of Jennifer’s first jobs is to prepare a budget for next year’s operations. In addition to the cost of food products and foodservice employees, what other expenses will Techmar incur by providing free meals to its employees? Since employees do not pay for their food directly, what will Jennifer likely use as the “revenue” portion of her budget? How do you think this number should be determined? In addition to her know-how as a foodservice director, what skills will Jennifer likely need as she interacts with the executives at Techmar who must approve her operating budget? For additional…arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)